Scott Seeks Business Sales Tax Exemptions

Wednesday

Jan 30, 2013 at 11:58 PM

TALLAHASSEE | You can gauge the start of spring in Tallahassee by the blooming of the azaleas and dogwoods. You can gauge the financial health of state government by the growing abundance of tax-break legislation.

By LLOYD DUNKELBERGERLEDGER TALLAHASSEE BUREAU

TALLAHASSEE | You can gauge the start of spring in Tallahassee by the blooming of the azaleas and dogwoods. You can gauge the financial health of state government by the growing abundance of tax-break legislation.

With state finances perking up, Gov. Rick Scott wants to continue his incremental campaign to abolish the corporate income tax. He also wants to exempt Florida manufacturers from paying the sales tax on their equipment purchases.

The proposals — along with his plan to increase public school funding by $1.2 billion — will be part of Scott's budget $70 billion-plus budget plan that he will outline today.

In the Legislature, lawmakers are advancing a bill to give a tax break to the owners of the Miami Dolphins football stadium. Not to be left out, House Speaker Will Weatherford, R-Wesley Chapel, says he also expects tax-break bills for the Daytona International Speedway, the Jacksonville Jaguars stadium and an Orlando soccer arena.

Tax break proponents say they are designed to promote economic activity. The corporate tax breaks are supposed to bring more jobs, and the refurbished sports stadium more fans and their spending.

But tax breaks also mean fewer dollars for the state budget. And the question is, can the state afford the blossoming of tax break legislation while it is still trying to meet other critical needs, such education and health spending?

Scott wants to expand the exemption for smaller businesses that now pay the corporate income tax, extending the tax break to some 2,000 Florida businesses in the coming year.

But the largest tax break he is seeking — and he called it one of his "absolute top priorities" — would exempt manufacturers from paying the 6 percent state sales tax on equipment purchases.

The exemption would cost the state $115 million in annual tax collections but represent a savings of $141 million to businesses.

Scott said the tax break is necessary to boost Florida's relatively low manufacturing base while offering a key incentive for businesses to come to Florida or to expand existing facilities in the state.

"Our current tax policy puts the state at a competitive disadvantage because most states do not force manufacturers to pay taxes on the purchase of equipment or require them to adhere to regulations for tax exemptions," Scott said.

Giving the tax break will spur more manufacturing, which in turn means more long-term, stable jobs for Floridians, Scott said.

Former Democratic state Sen. Nan Rich, who wants to challenge Scott in his 2014 re-election, questioned the need for those tax breaks.

"I just don't hear the outcry. We are not a heavily taxed state," Rich said.

Instead, she said the state should be looking at closing some existing tax loopholes — such as the sales tax exemption for Internet sales — to generate more money for Florida's schools, health care and other programs.

Lawmakers are pushing their own tax breaks.

Next week, the Senate Commerce and Tourism Committee — headed by Sen. Nancy Detert, R-Venice — will take up a bill by Sen. Oscar Braynon, D-Miami Gardens, that would give the owners of the Miami Dolphins stadium an annual sales tax rebate of some $3 million.

It would help pay for part of a proposed $400 million renovation plan for the Miami-Dade County facility.

Another measure, which has been filed in the House (HB 219) and Senate (SB 358), would provide a similar sales tax break for a Major League Soccer facility in the Orlando area.

Weatherford, the House speaker, said he also has heard potential proposals for tax breaks for improvements at the Jaguars NFL stadium in Jacksonville and the Daytona International Speedway.

Neither Weatherford nor Senate President Don Gaetz, R-Niceville, have taken a position on the sports team tax breaks. But they both cautioned on Wednesday that although state revenues are growing in the coming year, there will not be an abundance of new money.

Weatherford said he is referring all the sports team tax breaks to his Finance and Tax Subcommittee where he expects them to be "very carefully" reviewed. He said the tax breaks will have to be viewed as whole and not judged individually.

"We have breathing room in our budget," Weatherford said, noting that it was limited. "We're going to have to decide what our priorities are."